Elaine Dobson, partner at Bircham Dyson Bell LLP is warning non matrimonial co-habitees that there is currently no 'common law' to settle disputes when relationships break down and assets must be split - and to put in place an agreement at the point of purchase to protect themselves in such an event.
The case of Jones Vs Knott serves as a warning to those buying homes together. The ruling went in favour of Mrs Jones who had acquired a house with Mr Kernott and then continued to live in the property with the children from the relationship for a further thirteen years after the relationship with Mr Kernott broke down before proceeding to sell the home. Mr Kernott received the proceeds of an insurance policy at the time of the split and did not contribute financially during those 13 years.
"The key point in this case appears to be the decision of the court that the property should be split 90% to 10% in favour of Mrs Jones as she had lived in the property a further thirteen years after Mr Kernott had left and he had not contributed in that time," explains Elaine Dobson, partner, Bircham Dyson Bell LLP.
"Often non matrimonial co-habiting couples would look to sell the joint property sooner and both would ordinarily continue to pay the mortgage, bills and upkeep of the property which would often then see a 50/50 split of the asset.
"In this case, the Court ruled that it was fair and reasonable for Mrs Jones to retain 90% of the asset for herself and her children given time and contributions by both parties. The Court were asked to determine the issue as there was no Agreement in place at the outset to determine the legal situation should the couple split up and nor did the couple deal with the position when the relationship broke down.
"There is a surge in friends, siblings and non-matrimonial couples buying properties together due to the price of property and the lack of finance, so having an agreement in the form of a Declaration of Trust is becoming more important. It may cost a few hundred pounds to put one in place at the point of purchase, but it could save thousands in the long run if joint owners are unlucky enough to fall out or go their separate ways.
"I'd urge anyone in the situation buying a house together to put the right legal documents in place to save time, money and heartache down the line."
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